Ladanza Corporation Is a wholesaler that sells a single prod

Ladanza Corporation Is a wholesaler that sells a single product. Management has provided the followlng cost data for two levels of monthly sales volume. The company sells the product for $134.00 per unit 11,490 Sales volume (units) Cost of sales Selling and administrative costs 9,500 $731,500 The best estimate of the total contribution margin when 10,060 units are sold is: O $303,110 O $466130 O $352100 O $200,570

Solution

Total fixed cost and variable cost/unit do not change with change in units.

Variable Cost of sales/unit=(731500/9500)=$77

For selling and administrative costs:

Variable cost=(739780-696000)/(11490-9500)=$22

Total fixed cost=739780-(22*9500)=$530780

Contribution margin=Sales-Variable costs

=134-(77+22)=$35

Hence total Contribution margin

=($35*10060)

which is equal to

=$352100.